Technical analysis of EUR/USD for July 16, 2015

The pair fell at yesterday's session after the written testimony of Janet Yellen. She expressed an optimistic outlook for the US economy and hopes for another interest rate hike.

According to Fed William, strengthening US economy signals that the Fed may raise it interest rates in 2015. The possibility that the US inflation rate rises to 2% by the end of 2016 is 50%. Compared to the last week, the situation in Greece is «a little less worrying.»

BlackRock CEO Larry Fink says «Fed rate hike will make more money into the bond market, rather than less. The Fed is expected to begin normalizing interest rate path».

S&P's view on the eurozone: The eurozone GDP growth rate forecast for 2015 was revised up to 1.6% (from 1.5%). For 2016, the growth rate forecast was raised to 1.9% (from 1.7%).

Today, traders eye the outcome of the Eurogroup's meeting and decision on the interest rate. We expect the ECB to maintain its rate unchanged. Besides, US unemployment claims and Philly Fed Manufacturing index are due. The Fed chairwoman Yellen testifies before Senate Banking Committee.

Technical view: In the daily chart, the pair lost all the moving averages. After 7 days of consolidation at 100Dsma, it finally closed below that at yesterday's session. The parallel support is found at 1.0916. The 20Wsma is seen at 1.1015. In case pair loses the level of 1.0916 on the down side, 1.0980 and 1.0820 are likely to be reached in a day or two. We still recommend selling on rises with a target at 1.0720 for a while.

The pair has been reaching lower highs and lower lows in the four-hour chart. Today, we expect the pair to hit 1.0880 and 1.0860. Intraday resistance is seen at 1.0975, 1.1000, and 1.1030. Support is found at 1.0916, 1.0890, and 1.0850.